JUDGMENT : Prashant Kumar, J. 1. Heard Sri Navin Sinha, learned Senior Counsel assisted by Sri Utkarsh Srivastava, counsel for the appellants and Sri Syed Safdar Ali Kazmi, learned counsel for the respondents. 2. Brief facts of the case are, that the parties herein had entered into a partnership agreement on 01.04.1997 with the intention to construct a hotel and run the same in the partnership. It was decided that the business would be carried out in a partnership which would run the hotel, bar and restaurant in Agra and the head office of this business would be at E-14, Kailash Colony at New Delhi. This arrangement was such where the claimant (respondents herein) would invest the capital, and the appellants (herein) would be a working partner and would be responsible for running the business, maintaining the accounts and handle the situation which arises in the ordinary course of business. During the construction of hotel the claimant not only provided sufficient fund for construction and for running the hotel, but also gave a personal loan of Rs. 20 lakh to the appellants. The construction was completed in December 1999. After opening and till July 2002, the hotel ran well and made a profit. After July, 2002, the appellants (herein) turned dishonest and stopped paying the profit to the respondents on the pretext that the business was running in loss. He did not allow the respondents to inspect the accounts. Since the hotel was located at the prime location, hence, the occupancy was very high. After February 2003, the appellants stopped the respondents from entering into the property the hotel. 3. In the agreement there was an arbitration clause which provided for arbitration in case of dispute between the parties which is reproduced herein under:- “9. In case of dispute relating to the partnership or the business carried on under it, shall be referred to arbitrator and his decision shall be binding on both the parties.” It was worthwhile to mention that the arbitration clause was silent on the place of arbitration. 4. Since the respondents were not given the due profit share neither they were allowed to enter the property or had access to the accounts, so the respondents were left with no other option, but to invoke the arbitration clause, and approached the Court for appointment of arbitrator to adjudicate the differences so arose between the parties. 5.
4. Since the respondents were not given the due profit share neither they were allowed to enter the property or had access to the accounts, so the respondents were left with no other option, but to invoke the arbitration clause, and approached the Court for appointment of arbitrator to adjudicate the differences so arose between the parties. 5. The respondents (herein) on 09.11.2006 had filed application under Section 9 of the Arbitration and Conciliation Act, 1996 (herein after for the sake of brevity has been referred to as “Arbitration Act”) which was numbered as Arbitration Case No. 533 of 2006. 6. On this Section 9 application, the Court was pleased to direct that, “the applicant (respondents herein) would be allowed to enter the premises and inspect the record relating to the business and to take part in the management of the business as well”. 7. On 02.01.2008 on the joint request of the parties one Sri Rakesh Kaushal resident of Jaipur was nominated by both the parties to be the sole arbitrator in the case. Accordingly, the Court appointed Sri Rakesh Kaushal as sole arbitrator. The Court directed that the arbitrator shall be at liberty to pass orders under Section 17 of the Arbitration Act. The Court further directed that claimants would not be restrained by the appellants from entering the business premises and also from taking part in the management of the business. 8. The arbitrator took up the Arbitration Reference on 12.07.2008 and after hearing both the parties, the Tribunal decided that the venue of the Arbitration Tribunal, would be at 43, Burmese Colony, Jaipur. 9. On 17.08.2008 the Claimant/Respondents filed his claim. Numerous opportunities were given to the appellants to file Statement of defence/Written statement. For the reasons best known to them, they chose not to file the same. They neither filed any counter claim inspite of getting sufficient number of opportunities. It was clear that the appellants were avoiding the arbitration proceedings and were adopting dilatory tactics. 10. Right from the inception of the arbitration proceedings, it was the endeavour of the appellants either to scuttle the hearings, or to delay the arbitration proceedings. They went to the extent of threatening the arbitrator to withdraw from the proceedings. 11.
It was clear that the appellants were avoiding the arbitration proceedings and were adopting dilatory tactics. 10. Right from the inception of the arbitration proceedings, it was the endeavour of the appellants either to scuttle the hearings, or to delay the arbitration proceedings. They went to the extent of threatening the arbitrator to withdraw from the proceedings. 11. The Arbitral Tribunal after going through the statement of claimant and the written argument and after considering the facts and evidence on record, came to the conclusion that, the hotel business which was run under the partnership had earned profit, and gave an Award under various heads in favour of the respondents. Further the Tribunal held that the award will carry an interest of 15% per annum from the date of award till its realization. 12. Aggrieved against the award, the appellants filed an application under Section 34 of the Arbitration Act for setting aside the arbitral award before the Commercial Court Agra, inter alia on the ground of independence of the arbitrator, venue of arbitration, not affording an opportunity of hearing. This application was numbered as arbitration Case No. 73 of 2010 in the Commercial Court, Agra. The Commercial Court, Agra after hearing both the parties was pleased to reject the application filed under Section 34 of the Arbitration Act by the appellants vide order dated 23.01.2023 on the ground that the award passed by the arbitrator was not against a public policy and was not in conflict with the public policy of India. 13. Aggrieved against order passed by the Commercial Court, Agra, the appellants (herein) had preferred the instant appeal under Section 13 (1A) which is specifically enumerated under Section 37 of the Arbitration Act. 14. Heard counsel for the parties and perused the record. 15. In this appeal, two issues were raised, firstly, about the seat of arbitration and the court which would have supervisory jurisdiction. Secondly, on facts, that the award was passed without any evidence and was not a speaking award, there was a limitation issue, and compound interest on the pre award period could not have been awarded. 16. On the First issue, counsel for the appellants submits that both the courts in Agra and Jaipur would have jurisdiction to entertain application under Section 34 of the Arbitration Act as the cause of action arises in both the places. 17.
16. On the First issue, counsel for the appellants submits that both the courts in Agra and Jaipur would have jurisdiction to entertain application under Section 34 of the Arbitration Act as the cause of action arises in both the places. 17. Counsel for the respondents submits that since there was no place of arbitration mentioned in the agreement, hence, it was open for the arbitrator to choose the place of arbitration. Once the seat of arbitration have been chosen, any application/appeal subsequent to it, can only be filed or entertained in the court, which has supervisory jurisdiction over the place where arbitration is carried out. Hence the appeal filed under Section 34 of the Arbitration Act in Agra, could also not have been filed. 18. The respondents urged that the scope of Section 34 of the Arbitration Act is very limited, and as per various judgment of Hon’ble Supreme Court, it is clear that the Court cannot interfere unless and until it falls within the straight jacket of the provisions under Section 34 of the Arbitration Act. The counsel for the respondents further submitted that in various judgments of Hon’ble Supreme Court it has clearly been laid down that, Section 37 of the Arbitration Act could not be entertained by the courts, as court of appeal who will look into the award on the appellate side, unless and until it is shown and proved that the award is in conflict with the public policy of India or in contravention of fundamental policies of Indian law or in conflict with most basic notion of morality or justice, or the award is vitiated by patent illegality appearing on the face of the award, the application or appeal cannot be entertained. 19. We deem appropriate to deal with the First issue of “jurisdiction of the supervisory Court” first. 20.
19. We deem appropriate to deal with the First issue of “jurisdiction of the supervisory Court” first. 20. Before entering into the dispute, the relevant provision of Arbitration Act, 1996 which is important for adjudication, is being reproduced herein under:- Section 2 (1)(e) ‘Court’ means the Principal Civil Court of Original Jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such Principal Civil Court, or any Court of Small Causes;” “Section 20. Place of arbitration.—(1) The parties are free to agree on the place of arbitration. (2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the Arbitral Tribunal having regard to the circumstances of the case, including the convenience of the parties. (3) Notwithstanding sub-section (1) or sub-section (2), the Arbitral Tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.” 20A. A plain reading of Section 20 leaves no room for doubt that the parties are free to agree to any “place” or “seat” of Arbitration. In the absence of the parties' agreement thereto, Section 20 (2) of the Arbitration Act authorises the Tribunal to determine the place/seat of such arbitration. 21. The Five Judge Bench of the Hon’ble Supreme Court in the case of Bharat Aluminium Company Vs. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 in paragraph No. 96 held that:- “……...The term “subject-matter of the arbitration” cannot be confused with “subject-matter of the suit”. The term “subject-matter” in Section 2(1)(e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. The provision in Section 2(1)(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy.
Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. The provision in Section 2(1)(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy. The legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Both the courts would have jurisdiction i.e. the court within whose jurisdiction the subject-matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution i.e. arbitration is located.” 22. The decision of Bharat Aluminium Company was followed by the Hon’ble Supreme Court in BGS SGS SOMA JV vs. NHPC Limited, (2020) 4 SCC 234 in which the issue was, as to which court would have exclusive jurisdiction over the arbitration, as opposed to the place where whole or part of the cause of action arises. The Hon’ble Supreme Court in paragraph-38 held that:- “38.……… The BALCO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 : (2012) 4 SCC (Civ) 810] judgment, when read as a whole, applies the concept of “seat” as laid down by the English judgments (and which is in Section 20 of the Arbitration Act, 1996), by harmoniously construing Section 20 with Section 2(1)(e), so as to broaden the definition of “court”, and bring within its ken courts of the “seat” of the arbitration [ Section 3 of the English Arbitration Act, 1996 defines “seat” as follows:“3. Theseatofthearbitration.— In this Part “the seat of the arbitration” means the juridical seat of the arbitration designated—(a) by the parties to the arbitration agreement, or(b) by any arbitral or other institution or person vested by the parties with powers in that regard, or(c) by the Arbitral Tribunal if so authorised by the parties,or determined, in the absence of any such designation, having regard to the parties' agreement and all the relevant circumstances.”It will be noticed that this section closely approximates with Section 20 of the Indian Arbitration Act, 1996.
The meaning of “Court” is laid down in Section 105 of the English Arbitration Act, 1996 whereby the Lord Chancellor may, by order, make provision allocating and specifying proceedings under the Act which may go to the High Court or to county courts., judgment, when read as a whole, applies the concept of “seat” as laid down by the English judgments (and which is in Section 20 of the Arbitration Act, 1996), by harmoniously construing Section 20 with Section 2(1)(e), so as to broaden the definition of “court”, and bring within its ken courts of the “seat” of the arbitration” In this case it was held that jurisdiction would be given to two sets of courts, namely, those courts which would have jurisdiction where the cause of action is located; and those courts where the arbitration takes place. 23. Thereafter, in the matter of Indus Mobile Distribution (P) Ltd. vs. Datawind Innovations (P) Ltd., (2017) 7 SCC 678 the Hon’ble Supreme Court properly analyzed the provisions of Section 20 of the Arbitration Act and came to a conclusion that when there is no place of arbitration mentioned in the agreement and where the Arbitral Tribunal determines a particular place as the seat of the arbitration under Section 31(4) of the Arbitration Act, it becomes clear that the parties having chosen the seat, (or the Arbitral Tribunal having determined the seat), have also chosen the courts at the seat for the purpose of interim orders and challenges to the award. 24. The Hon’ble Supreme Court in the matter of BBR (India) Private Limited Vs. S.P. Singla Constructions Private Limited, (2023) 1 SCC 693 had again dealt with the issue of jurisdiction or supervisory Court where the place of arbitration was fixed under Section 20 (2) of the Arbitration Act by the Arbitrator. The Hon’ble Supreme Court had held that, all applications under Part I will be preferred in the court where “the seat” is located as that court would alone have jurisdiction over the arbitration proceedings and all subsequent proceedings arising out of the arbitration proceedings. The quotation also clarifies that when either no “seat” is designated by an agreement, or the so-called “seat” is only a convenient venue, then there may be several courts where a part of the cause of action arises that may have jurisdiction.
The quotation also clarifies that when either no “seat” is designated by an agreement, or the so-called “seat” is only a convenient venue, then there may be several courts where a part of the cause of action arises that may have jurisdiction. An application under Section 9 of the Arbitration Act may be preferred before the court in which a part of cause of action arises in the case where parties had not agreed on the “seat of arbitration”. This is possible in the absence of an agreement fixing “the seat”, as an application under Section 9 may be filed before “the seat” is determined by the Arbitral Tribunal under Section 20(2) of the Arbitration Act. Consequently, in such situations, the court where the earlier application has been made, being the court in which a part or entire of the cause of action arises, would then be the exclusive court under Section 42 of the Arbitration Act. Accordingly, such a court would have control over the arbitration proceedings. 25. In view of the ratio laid down by the Hon’ble Supreme Court, it is clear that in this case though the seat of arbitration was in Jaipur but the Court in Agra would also have supervisory jurisdiction as Section 9 application was filed before the District Judge, Agra prior to the seat being determined by the Arbitral Tribunal. 26. Accordingly, we find no merit in the arguments of the respondent, and hold that the application under Section 34 of the Arbitration Act has rightly been filed in the Commercial Court, Agra and the Court in Agra would have supervisory jurisdiction over arbitration. 27. Secondly, the appellants have challenged the Award on merit. Counsel for the appellants submitted that, it is a case of no evidence as award has been passed without there being any evidence on record, the award was not a speaking award, the future income could not have been contemplated, claim for share of profit was not arbitrable, the award is unreasoned and that the part of the claim was barred by limitation. 28. The appellant argued that, the Award lacks proper reasoning. Though, it has been further argued that it is the duty of the arbitrator under Section 25 (b) of the Arbitration Act to proceed without treating that failure of the respondent to rebut the allegation as an admission.
28. The appellant argued that, the Award lacks proper reasoning. Though, it has been further argued that it is the duty of the arbitrator under Section 25 (b) of the Arbitration Act to proceed without treating that failure of the respondent to rebut the allegation as an admission. The Award do not entail any reason or analysis whatsoever in support of the relief awarded to the claimant. This argument raised by the counsel for the appellants that the impugned award is without any reasoning, will also hold no ground because of the fact that claimant has filed the statement of claim and had supported his claim with the available evidence on record. The claim made by the claimant has never been denied by the respondents. The Award was well reasoned and well analyzed. 29. Counsel for the appellants relied on the judgment passed by the Hon’ble Supreme Court in the matter of Associate Builders v. Delhi Development Authority and argued that if an arbitrator gives no reason for an award, then it will be in contravention of Section 31 (3) of the Arbitration Act, such award will be liable to be set aside.” This argument also, is of no help to the appellant, as it is not a case where the award was passed without any evidence, or documents and material on record. It cannot be said that the arbitrator has not given any reasoning while passing the award. The Arbitrator while deciding the claim was careful enough not to pass an award merely for asking of the claimant but went deep into the details before passing the award, he had also kept in mind the provision of Section 25 (b) of the Arbitration Act before passing the award. Hence, it cannot be said that the impugned order was unreasoned. 30. In reply to the averments made by the counsel for the appellants, the respondents submitted that, all evidences and documents available with the claimant were produced before the arbitrator and the same was never objected to, or denied by the Appellants. Even affidavit of manager was filed before the arbitrator which clearly mentions the number of rooms, the amount charged, the occupancy of the hotel, the expenses, the income and the profits of the hotel. This has now been denied by the appellants.
Even affidavit of manager was filed before the arbitrator which clearly mentions the number of rooms, the amount charged, the occupancy of the hotel, the expenses, the income and the profits of the hotel. This has now been denied by the appellants. Moreover, the counsel for the respondents took us to the record which shows that there was enough evidence on the basis of which the arbitrator had passed a speaking award. 31. Counsel for the respondents submitted that on the basis of income, expenses, profit, the arbitrator has assessed the future income. The appellants (herein) who had cheated the claimant by not giving his due shares and solely enjoying the property and the income coming out of the property. He was not furnishing the account and not giving true account so there was no way arbitrator could have calculated the profit and hence, proceeded to decide on the basis of proposed income. Hence, this procedure adopted by the Arbitrator in passing the Award seems to be perfectly justified. 32. The arguments raised by the counsel for the appellants that the award has been passed without any evidence is also not tenable. The share of profit of partnership firm arising out of room rent, boarding facility and other activities was available to substantiate the evidence before the arbitrator. The appellants made no endeavour to rebut the evidence before the Arbitrator. As a matter of fact, the Arbitrator, just not awarded, what was claimed by the claimant, but only awarded, what was substantiated by the evidence on record. 33. Counsel for the appellants further argued that partially the claim (in respect of profit w.e.f. 2000 to September 2003) was barred by limitation, he submitted that in the present case, the notice invoking arbitration necessary for the commencement of arbitral proceedings under Section 21 was issued on 11th October, 2006. Section 43 of the Arbitration Act provides as follows:- “Section 43: Limitations – (1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in Court. (2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on the date referred in section 21…...” Hence, the claim sought and granted for the period January 2000 to September, 2003 by the Ld.
(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on the date referred in section 21…...” Hence, the claim sought and granted for the period January 2000 to September, 2003 by the Ld. Arbitrator is barred by limitation under Article 137 of the Schedule to The Limitation Act, 1963. 34. In reply to it, counsel for the respondents submitted that the claim was not barred by limitation. 35. Article 5, Article 113 and Article 137 of the Schedule which have bearing on the issue, are as follows : Description of Suit Period of Limitation Time from which period begins to run 5. For an account and a share of the profits of a dissolved partnership. Three years. The date of the dissolution. 113. Any suit for which no period of limitation is provided elsewhere in this Schedule. Three years When the right to sue accrues. 137. Any other application for which no period of limitation is provided elsewhere in this division. Three years When the right to apply accrues. 36. In an action for an account and a share of the profits of a dissolved partnership firm, the time begins to run for purposes of calculating the limitation from the date of dissolution of the partnership. Under Article 113 and Article 137, the time starts running when the right to sue / apply accrues. 37. Lindley in his treatise on the Law of Partnership, Fifteenth Edition, while considering as to what would be the period for which account could be taken or carried back states that “the time from which an account is to begin will, in a general account of partnership dealings and transactions, be the commencement of the partnership, unless some account has since that time been settled by the partners, in which case the last settled account will be the point of departure”. The limitation prescribed for bringing an action for accounts is not the same as the period for which account can be sought. Under Article 5, the time begins to run from the date of dissolution of partnership firm. Under Article 113/137, time begins to run from the date right to sue /apply accrues.
The limitation prescribed for bringing an action for accounts is not the same as the period for which account can be sought. Under Article 5, the time begins to run from the date of dissolution of partnership firm. Under Article 113/137, time begins to run from the date right to sue /apply accrues. The right to sue/apply under Article 113/137 would accrue when account is demanded but is denied or where the account is to be rendered periodically in terms of a specific stipulation in that behalf in the agreement and the same is not adhered to. In the instant case, the latter was not applicable and therefore, the right to sue/apply accrued when the account was demanded but was denied. It is not the case of the appellant that the claim as a whole was barred by limitation. What is alleged is that the claim for accounting in respect of the period January 2000 September 2003 was barred by limitation. It is based on the premise that profit and loss was to be accounted for every year. Therefore, the time started running at the end of every year and after three years the claim for accounting for that particular year would be beyond limitation. However, as noted above, in the absence of any stipulation for sharing of profits/loss at the end of every year or on any specified date, we are unable to accept the contention. Infact the plea taken in this behalf is seemingly paradoxical. The appellant had opposed the relief relating to accounting, as noted in earlier part of the judgment, by contending that the claim was pre-mature in the absence of any specific date in the agreement for accounting. 38. While it is impermissible to re-open a settled account, there is no legal impediment in claiming profit/loss of the account for the entire period for which the account had not been rendered, unless any such bar could be inferred from the term of the partnership agreement. We thus find no merit in the contention that the claim in respect of profit w.e.f. 2000 to September, 2003 was barred by limitation. 39. The Counsel for the appellants argued that Arbitrator did not have the power to grant interest @ 15 % per annum consolidated. This argument was opposed by the counsel for the respondents. 40. Hon’ble Supreme Court in the matter of Renusagar Power Co.
39. The Counsel for the appellants argued that Arbitrator did not have the power to grant interest @ 15 % per annum consolidated. This argument was opposed by the counsel for the respondents. 40. Hon’ble Supreme Court in the matter of Renusagar Power Co. Ltd vs General Electric Co., 1994 AIR 860, has held that Award of compounding interest by an Arbitral Tribunal is not against the public policy of India. This portion as laid down was codified in the Arbitration Act, 1996. 41. Earlier a Division Bench of the Hon’ble Supreme Court in State of Haryana vs. S.L. Arora and Company, (2010)3 SCC 690 , had held that Arbitral Tribunal does not have the power to award compound interest unless specifically provided in the contract or in the statute. 42. Thereafter, the Law Commission of India in its 246th Report clarified that the terms of Section 31 (7) of the Arbitration Act are of vital impact. As per the report, the Scheme of the relevant provisions of the Arbitration Act indicated that the award of interest is not only permitted but is also the norm. The Commission was of the opinion that the decision of SL Arora needs to be revisited. 43. Thereafter, the ratio laid down by Hon’ble Supreme Court in S.L. Arora (supra) was over-ruled by a Full Bench of Hon’ble Supreme Court in M/S Hyder Consulting (UK) Ltd. vs Governor, State Of Orissa through Chief Engineer, (2015) 2 SCC 189 , wherein it was held that Section 31 (7) of the Arbitration Act uses ‘sum’. This would entail both principle and interest. Once interest is included in the sum, for which the award is made, the original sum and intent cannot be segregated or seen as independent of each other. 44. The Hon’ble Supreme Court again, in the matter of UHL Power Company Limited Vs. State of Himachal Pradesh has reiterated the ratio laid down in Hyder Consulting and has allowed the award containing interest in award. 45. In view of above mentioned ratio laid down by the Hon’ble Supreme Court, it is held that the Arbitrator has power to grant interest in a pre award period to be compounded annually, hence, we find no force in the argument of the appellants on the issue of grant of interest to be compounded annually for the pre award period. 46.
46. We are well aware by scope of interference in an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, which arise out of Section 34 proceedings in the Arbitration Act. Though, Hon’ble Supreme Court in the J.G. Engineers (P) Ltd. v. Union of India, Associate Builders v. Delhi Development Authority, SSangyong Engineering and Construction Company Pvt. Ltd. v. NHAI has held that the scope of interference under Sections 34 and 37 of the Arbitration Act is very narrow. Keeping this view in mind, we do not intend to sit in appeal and look into the documents and re-appreciate the evidence. 47. Learned counsel for the respondents relied upon the judgment of Hon’ble Supreme Court in the matter of ONGC Ltd. v. Saw Pipes Ltd., (MANU/SC/0314/2003 : (2003) 5 SCC 750) wherein, it was held that a court can set aside an award under Section 34(2)(b)(ii) of the Arbitration Act, if it is in conflict with the public policy of India, or if it is contrary to the fundamental policy of Indian law; or contrary to the interests of India; or contrary to justice or morality; or patently illegal. The Court further explained that to hold an award to be opposed to public policy, the patent illegality should go to the very root of the matter and not a trivial illegality. It is also observed that an award could be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court, as then it would be opposed to public policy. 48. In the matter of J.G. Engineers (P) Ltd. v. Union of India, the Hon’ble Supreme Court has, demarcated the boundary while explaining the ambit of Section 34(2) of the Arbitration Act, this boundary so demarcated has to be strictly followed. 49. The Hon’ble Supreme Court in the matter of Associate Builders v. Delhi Development Authority, has further clarified the scope of judicial intervention under the appeal in the Arbitration Act held as under :- “It must clearly be understood that when a court is applying the "public policy" test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected.
A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus, an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score[1]. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts.” 50. The law is well settled that, where the Arbitrator has assessed the material and evidence placed before him in detail, the court while considering the objections under Section 34 of the said Arbitration Act does not sit as a court of appeal and is not expected to re-appreciate the entire evidence and reassess the case of the parties. The jurisdiction under Section 34 is not appellate in nature and an award passed by an Arbitrator cannot be set aside on the ground that it was erroneous. It is not open to the Court to interfere with the award merely because in the opinion of the Court, another view is possible. The duty of the Court in these circumstances is to see whether the view taken by the Arbitrator is a plausible view on the fact, pleadings and evidence before the Arbitrator. 51. The extent of judicial scrutiny under Section 34 of the Arbitration Act is limited and scope of interference is narrow. Under Section 37, the extent of judicial scrutiny and scope of interference is further narrower. An appeal under Section 37 is like a second appeal, the first appeal being to the court by way of objections under Section 34. Where there are concurrent findings of facts and law, first by the Arbitral Tribunal which are then confirmed by the court while dealing with objections under Section 34, in an appeal under Section 37, the Appellate Court would be very cautious and reluctant to interfere in the findings in the award by the Arbitral Tribunal and confirmed by the court under Section 34. 52. As a matter of fact, the arbitrator in his award had very categorically stated that it was an endeavour of the appellants to delay the hearing. They did not co-operate, and time and again only created hurdles in the arbitration proceedings.
52. As a matter of fact, the arbitrator in his award had very categorically stated that it was an endeavour of the appellants to delay the hearing. They did not co-operate, and time and again only created hurdles in the arbitration proceedings. The Arbitrator on the basis of documents and other evidence on record has passed well reasoned award. 53. In view of the aforesaid facts, we come to the conclusion that the Commercial Court, Agra had jurisdiction to entertain the application filed under Section 34 of the Arbitration Act challenging the award. However, we find no ground to interfere in the matter. The instant appeal filed under Section 13 (1-A) of the Commercial Court Act, 2015 which infact are the appeals enumerated under Section 37 of the Arbitration Act. Accordingly, the order passed by the Commercial Court under Section 34 of the Arbitration Act is upheld. 54. The appeal is accordingly dismissed.